NYT: High Rice Cost Creating Fears of Asia Unrest

By KEITH BRADSHER

Published: March 29, 2008

HANOI — Rising prices and a growing fear of scarcity have prompted some of the world’s largest rice producers to announce drastic limits on the amount of rice they export.

The price of rice, a staple in the diets of nearly half the world’s population, has almost doubled on international markets in the last three months. That has pinched the budgets of millions of poor Asians and raised fears of civil unrest.

Shortages and high prices for all kinds of food have caused tensions and even violence around the world in recent months. Since January, thousands of troops have been deployed in Pakistan to guard trucks carrying wheat and flour. Protests have erupted in Indonesia over soybean shortages, and China has put price controls on cooking oil, grain, meat, milk and eggs.

Food riots have erupted in recent months in Guinea, Mauritania, Mexico, Morocco, Senegal, Uzbekistan and Yemen. But the moves by rice-exporting nations over the last two days — meant to ensure scarce supplies will meet domestic needs — drove prices on the world market even higher this week.

This has fed the insecurity of rice-importing nations, already increasingly desperate to secure supplies. On Tuesday, President Gloria Macapagal Arroyo of the Philippines, afraid of increasing rice scarcity, ordered government investigators to track down hoarders.

The increase in rice prices internationally promised to put more pressure on prices in the United States, which imports more than 30 percent of the rice Americans consume, according to the United States Rice Producers Association. The price that consumers pay for rice has already increased more than 8 percent over the last year.

But the United States is fortunate in also exporting rice; poor countries ranging from Sengal in West Africa to the Solomon Islands in the South Pacific are heavily dependent on imports and now face higher bills.

Vietnam’s government announced here on Friday that it would cut rice exports by nearly a quarter this year. The government hoped that keeping more rice inside the country would hold down prices.

The same day, India effectively banned the export of all but the most expensive grades of rice. Egypt announced on Thursday that it would impose a six-month ban on rice exports, starting April 1, and on Wednesday, Cambodia banned all rice exports except by government agencies.

Governments across Asia and in many rice-consuming countries in Africa have long worried that a steep increase in prices could set off an angry reaction among low-income city dwellers.

“There is definitely the potential for unrest, particularly as the people most affected are the urban poor and they’re concentrated, so it’s easier for them to organize than it would be for farmers, for example, to organize to protest lower prices,” said Nicholas W. Minot, a senior research fellow at the International Food Policy Research Institute in Washington.

Several factors are contributing to the steep rice in prices. Rising affluence in India and China has increased demand. At the same time, drought and other bad weather have reduced output in Australia and elsewhere. Many rice farmers are turning to more lucrative cash crops, reducing the amount of land devoted to the grain. And urbanization and industrialization have cut into the land devoted to rice cultivation.

In Vietnam, an obscure plant virus has caused annual output to start leveling off; it had increased significantly each year until the last three years.

Until the last few years, the potential for rapid price swings was damped by the tendency of many governments to hold very large rice stockpiles to ensure food security, said Sushil Pandey, an agricultural economist at the International Rice Research Institute in Manila.

But those stockpiles were costly to maintain. So governments have been drawing them down as world rice consumption has outstripped production for most of the last decade.

The relatively small quantities traded across borders, combined with small stockpiles, now mean that prices can move quickly in response to supply disruptions.

At the same time, prices set in international rice trading now have an increasingly important effect on prices within countries. This has been particularly true in an age of Internet and mobile phone communications when even farmers in remote areas can learn about distant prices and decide whether their own buyers are giving them a fair price.

Even before governments imposed restrictions this week, trading companies in exporting nations had become increasingly reluctant to sign contracts for future delivery as they wait to see how high prices will go.

“The market has pretty much ground to a halt for the past few weeks,” said Ben Savage, the managing director for rice at Jackson Son & Company, a commodities trading firm in London. Soaring prices are already causing hardship across the developing world.

In a crumbling covered market in an old neighborhood of Hanoi, Cao Minh Huong, a ceramics saleswoman, said that rising food prices, especially for rice, were forcing her to change her diet. “I’m spending the same amount on food but I’m getting less,” she said.

Together with rising prices for other foods, like wheat, soybeans, pork and cooking oil, higher rice prices are also contributing to inflation in many developing countries. Retail rice prices have already jumped by as much as 60 percent in recent months in Vietnam, trailing increases in wholesale prices but leading a broader acceleration in inflation. Prime Minister Nguyen Tan Dung of Vietnam announced Wednesday that the government’s top priority now was fighting inflation. Overall consumer prices are more than 19 percent higher this month than last March. . The inflation rate has nearly tripled in the last year.

Rice is unusual among major agricultural commodities in that most of the major rice-consuming countries are self-sufficient or nearly so. Only 7 percent of the world’s rice production is traded across international borders each year, according to figures from the United Nations Food and Agriculture Organization in Rome.

Nguyen Van Bo, the president of the Vietnam Academy of Agricultural Sciences, which oversees government farm research institutes, said in an interview that the government expected rice production to rise further by 2010 despite the rapid expansion of residential housing and factories into what had been prime rice-growing land. But the government needs to train farmers to alternate corn with rice to defeat rice pests like the virus, he said.

Vietnam, Egypt and India all limited rice exports last year, but the limits were much less drastic and were imposed much later in the year, after much more rice had been shipped.

The government of Thailand, the world’s largest rice exporter followed by Vietnam, has not yet limited exports. But a national debate has started in Thailand over whether to do so ,and Thai exporters have already practically stopped signing delivery contracts, Mr. Savage said.

Even before Friday’s export restrictions by Vietnam and India, bids for commonly traded grades of Thai medium-grain rice had doubled this year to $735 a metric ton. Vietnamese medium-grain rice had almost doubled to more than $700 a ton, with most of the increase coming in the last four weeks. Bids jumped as much as $50 a ton on Friday.

Governments have been reluctant to tell farmers to sell their rice at low fixed prices, for fear that farmers would hoard rice or not bother to grow as much as they could. On Friday, China, which is virtually self-sufficient in rice, raised the minimum prices for rice and wheat that it guarantees to farmers.

Biofuels news (um hummmm)

Food versus fuel in the Philippines

By Imelda V Abano

The government wants farmers to plant crops for biofuels on a vast scale. But could the quest for green energy create food shortages?

Growing world energy demand, the insecurity of long-term supply and the consequences of fossil fuel use for climate change are driving governments to look for alternatives. To meet rising energy needs, many countries are promoting the production and use of biofuels - energy extracted as a gas, liquid or oil from plants.

Derived from food crops such as corn, sugarcane, soybean, oil palm and sugarbeet, biofuel production has been on the rise in recent years. It is seen by many as a clean form of energy in an era of soaring oil prices and concerns over carbon emissions.

Jatropha, a plant originating in Central America that grows wild in many developing countries, including South Africa, India, Thailand, Malaysia, Indonesia, China and the Philippines, has suddenly found itself at the centre of a new phase in the world's alternative energy boom.

In the Philippines, there is currently much hype surrounding its production as a source of renewable fuel. Philippine President Gloria Macapagal-Arroyo has signed into law the Biofuels Act which mandates a minimum one per cent biodiesel blend and five per cent bioethanol blend in all diesel and gasoline fuels. To meet demand, the government is aggressively pushing for the cultivation of jatropha, believing it to be one of the best candidates for future biofuel production.

The government, through the Philippine National Oil Co.-Alternative Fuels Corp, is now looking at some 1.2 million hectares for jatropha production in the southern island of Mindanao. It is also busy identifying more than 400,000 hectares of land for private sector investments.

Jatropha curcas is a drought-tolerant non-edible shrub. It produces fruits the size of golf balls which contain oil that can be converted into biodiesel, a substitute for fossil fuel.

According to Rhandy Tubal, research specialist at the Department of Environment and Natural Resources in Cordillera, farmers who have received training to grow jatropha are enthusiastic about the crop. He says the cultivation of the plant could provide the first step out of poverty for Filipino farmers and claims that, depending on the density of the plants, each hectare can yield jatropha oil worth nearly US$2,000 a year.

"We are in the initial stage of planting jatropha and we are very optimistic that it is indeed one of the best candidates for biofuel. Farmers are very excited about its production," Tubal says, adding that only idle land would be used for jatropha planting to avoid competition with other crops.

However, research from Australia suggests the plant will need more intensive inputs to produce the oil used for biofuels and it can take several years to develop optimum yields. Furthermore, some experts warn the move may use up precious land that could be used to grow food and may eventually hurt subsistence farmers. Concerns over possible future food shortages have generated a 'food versus fuel' debate in the country.

Rachel Smolker, a biofuels specialist and research biologist for the US-based environmental group the Global Justice Ecology Project, fears the global rush to switch from oil to energy derived from plants will drive deforestation, push small farmers off the land and lead to serious food shortages and increased poverty unless carefully managed.

"If food sources become biofuels, that may lead to shortages and raise prices. The promotion of biofuels will have an impact on local food security as some fuel crops are also food crops," Smolker says.

Her view is echoed by Philippine Senator Miriam Santiago, author of the 2007 Biofuels Act, who has sought more governmental oversight of biofuels development, saying that backing biofuels could adversely affect the country's ability to produce its own food.

"Biofuel is land-based and will eventually compete with food. Because the Philippines has a small land area, biofuel production will tend to encroach on food production. Corporations are already searching for millions of hectares for jatropha alone. We have to step on the brakes and decelerate," she says.
Santiago thinks the Philippines "will not prosper by betting only on the biofuels option". She says the government should explore other alternative energy sources such as wind, solar, hydropower, geothermal and biomass.

But the Philippines' Environment Secretary Lito Atienza has defended the government's massive jatropha cultivation for the biofuels programme, saying it will not imperil the country's food supply.

"Jatropha is a non-food crop. So the issue over food versus fuel is not a debate about this crop. Jatropha grows on idle lands, particularly denuded mountains and forests, unfit for food crop cultivation, so it will not compete with land used for the production of food," Atienza says.

Widespread jatropha cultivation is fairly new in the Philippines. It is only recently, with the news that jatropha can be a source of biodiesel, that people have started planting larger areas of the crop.

All the more reason, according to Dr Emil Javier, president of the National Academy of Science and Technology, to check out its credentials. "The Philippines should do its homework and conduct thorough research on jatropha and see its viability compared with other alternative crops," he says.

The challenge, believes Achim Dobermann, a scientist from the Philippine-based International Rice Research Institute, is to ensure a balance between food and biofuel production. "There is an urgent need to strengthen policy research in order to avoid decisions that may lead to competition between food and bioenergy."

©Panos Pictures

Source: Panos London Online


http://www.checkbiotech.org:80/green_News_Biofuels.aspx?infoId=17206

http://www.globaljusticeecology.org/connections.php

Indigenous People Demand More Over Medicinal Plants

(an oldie but informative)

(The Monitor (Uganda) Via Thomson Dialog NewsEdge)Indigenous peoples and peasant farmers who have helped develop the world's plant genetic resources through their traditional knowledge say negotiations aimed at the commercial exploitation of plants must involve them from the very start.

But their demands have turned into a long-running dispute over sovereignty, national boundaries and ownership of knowledge. As the Curitiba meeting of the UN Convention on Biological Diversity (CBD) drew to a close in Curitiba recently, the men and women who nurture the world's biodiversity struggled to make their voices heard.

Although the Convention itself was supportive of traditional knowledge and so-called benefit sharing, many government delegations did not include members of indigenous populations. And those indigenous peoples who were able to make it to Curitiba want to maintain an independent voice that recognises their special position.

"There is a proposal to include indigenous people as part of country delegations. But there is a problem: in the Philippines there are 110 indigenous peoples groups but the government would only allow one or two onto the delegation," said Victorino Saway, a representative of the Panagtagbo people who live on Mindanao Island.

He added: "When you are part of a delegation, you speak their language. You will be controlled - your language will be controlled."

At the CBD negotiations, the issue was termed Access and Benefit Sharing (ABS), but the official title masked potentially difficult aspects relating to economics, politics and culture.

Indigenous peoples and smallholder farmers, through their traditional knowledge, innovation and practices have over centuries developed and nurtured plant species for agricultural and medicinal use, contributing not only to 'development' but also to cultural and biological diversity.

But now companies are developing medicines and crops that take advantage of these plant genetic resources.

Keen to protect their financial interests - and recoup the investment made into research and development - companies usually protect their products with patents. This means that from time to time, a new product comes on the market and reaps massive profits for the company.

Indigenous people and some developing countries with high levels of biodiversity are now demanding ownership over what they claim are their genetic resources. And they want to be part of negotiations about how these resources are used, by whom, and on what terms.

A central issue is the concept of Prior Informed Consent (PIC) - an approach supported by the CBD. "The prior informed consent of knowledge-holders must be attained before their knowledge can be used by others," the CBD says.

Saway agrees: "If prior informed consent is ignored, there will be no basis for negotiations. It provides a basis for saying yes or no to access."

Perhaps the most contentious issue surrounding ABS is that of national sovereignty. As with other international agreements signed by governments on behalf of their peoples, national sovereignty forms the very basis of the CBD.

So when an indigenous group claims knowledge of a plant, or demands to be involved in negotiations, their government can say that the knowledge belongs to the country as a whole, and will therefore be negotiated by the national government.

Sylvester Rogers from Senegal, who works for the Community Biodiversity Development Conservation Network, told the meeting: "We believe that recognition and protection of the rights of indigenous and local communities with regard to agro-biodiversity and their traditional knowledge is non-negotiable and integral to any strategies and efforts towards the sustainable management and use of biodiversity."

Without that recognition and protection, he said, the utilisation of biodiversity will be nothing more than economic and commercial transactions, reducing indigenous people and local communities to "mere vendors of biological resources without respect to deeply held spiritual, cultural and socio-economic connections to the earth and biodiversity."

Indigenous people have a powerful backer in Tewolde Egziabher, an Ethiopian environmentalist and scientist who heads the African Group at CBD negotiations. He supports an international regime which includes PIC and certificates of origin of knowledge.

Such a regime, some campaigners say, would not only lead to fair and equitable sharing of the world's biological wealth, but also result in fewer patent disputes, some of which have grabbed headlines in recent years.

One such case involved the Hoodia plant, which pitted the San population of southern Africa - supported by a coalition of NGOs - against western and other pharmaceutical firms.

The Hoodia is a succulent plant - found in the Kalahari Desert - that can suppress appetite, and could potentially be used as an anti-obesity drug.

The plant's active ingredient was patented by a South African research institute in the late 1990s. It gave a license to a British company, which in turn sold additional development and marketing licenses to Pfizer, the multinational drug company, and the food giant Unilever.

After a protracted dispute, a deal was struck with the South African research institute in 2003 whereby the San people of South Africa, Namibia, Botswana, Zambia and Angola would receive a percentage of the royalties from the sales of any future drugs produced from their knowledge of the Hoodia plant.

The San based their claims on a CBD provision, which says should get a share of benefits resulting from the commercial use of local genetic resources and traditional knowledge. But there are countless examples where indigenous populations have lost out, as Ujalla Masdik, an Indian campaigner, reminded the conference.

She referred to a case involving an energy-giving plant used by Kani tribal people in the southern Indian state of Kerala. "Discovered" accidentally by members of an Indian scientific expedition in the early 1990s, the plant, known by the Kani as arogyapacha, was tested by a local research institute.

The institute then obtained a license from the Kerala Drug Control Department to produce and market a tonic based on the plant. It was named Jeevani (derived from the Sanskrit word meaning 'life').

The product was patented in 1996, following which the research institute transferred the production license to a local drug manufacturer. Although the Kani Trust received half the license fee and royalty, they were not involved in the negotiations.

"Some countries have made local or national laws about indigenous people, but others don't recognise them, or say 'we are all indigenous people'," said Saway of the Philippines.

Saway and his colleagues, working in the Mount Kitanglad region of the Philippines, have drawn up an inventory of plants based on their traditional knowledge, which the community "claims as our own".

As a precaution, the inventory has been written in the community's language and the plants' uses have not been explained. "We also have our cultural guards who will apprehend anyone taking our customary rights without our consent," he added.

The biotechnology industry, the usual target of attacks by NGOs and activists working on biodiversity issues, backs an access and benefit sharing system that is workable and provides value for use of genetic resources.

Alwin Kopse, a spokesman for the biotech corporation, Syngenta, said he supported national regimes that were "practical and transparent". Certificates of origin, he said, might be easier to obtain for products derived directly from plants, rather than those that were indirectly derived.

Another problem with issuing certificates of origin, Kopse said, was that certain genetic resources are shared across different countries or indigenous peoples. "What we want is a workable benefits access regime" - one that is not loaded with technocratic stamps, which, he argued "may turn out to be costly".

He accepted that the industry should now be prepared to pay for access to genetic resources but said Syngenta prefers to offer "other benefits" rather than hard cash.

If the CBD protocol on access and benefit sharing is to work, Kopse pointed out, it would be important to define the nature of benefits and who should receive them - a complex set of issues in his view.

Distributed by AllAfrica Global Media. (allafrica.com)

Phillipinos say to dump the US dollar

OPEN NOTEBOOK
By Random Jottings
The Manilla Times

OFWs told: Shun dollars for pesos

GUESS none of us ever thought that in our lifetime this sort of financial advice would be imparted by an authoritative voice to overseas Filipino workers. But here we go, folks! In boldly predicting a bigger peso surge versus the dollar in the weeks ahead, the Trade Union Congress of the Philippines (TUCP) is calling on OFWs to forget about the dollar and consider placing their hard earned savings in peso accounts. “We now see the dollar at P37 to P38 by early summer. We are thus renewing our guidance for overseas Filipino workers and their families here to continue to shun the dollar and keep their savings in pesos,” said TUCP spokesperson Alex Agui­lar whose influential organization is basing its counsel on falling US interest rates that are bound to set off more capital flight out of the greenback. Aguilar also urged regulators to find ways to compel local banks to reduce their “oppressive and burdensome” remittance charges, in order to help lessen the powerful peso’s jolt on migrant workers and their families—a call that has also been made by Senator Loren Legarda through a Senate resolution she tabled four months ago. Stated Aguilar: “We are now convinced that, amid the lingering subprime mortgage crisis, credit crunch and housing slump that threaten to drag the broader US economy down, the Federal Reserve will have no choice but to bring its key rate down to as low as 2.50 percent.” The Federal Reserve—the American central bank—is widely expected to cut its key rate on January 30 by 50 basis points or one-half a percentage point, from 4.25 percent to 3.75 percent, and then follow this up with more cuts in future meetings in March, May and June. Already Goldman Sachs, one of the world’s leading investment banks, warned of a US recession, and predicted more aggressive rate cuts by the Federal Reserve. Since September last year, the Federal Reserve has already cut its key rate three times, by a total of 100 basis points, or a full percentage point, from 5.25 percent to 4.25 percent. Aguilar described as “self-fulfilling” the peso’s rise versus the once mighty US dollar. As the peso continues to advance, the government and the private sector are seizing the opportunity to pay down, or totally get rid of, their dollar-denominated debt obligations. This has had the effect of diminishing the future need for dollars intended to service debts, thus creating an excess dollar supply going forward. The TUCP’s Aguilar also said migrant Filipino workers are actually sending home more dollars to compensate for the strong peso, thus further bloating the dollar surplus. “If a family wholly dependent on remittances needs P15,000 monthly to cover living expenses, the head who is abroad has no choice but to now send home about $368 monthly to produce the P15,000 at $1:P40.74, compared to only about $267 four years ago, when the rate was $1:P56,” he said. Aguilar cited a report by the Bank of the Philippine Islands which indicated that prior to the peso’s sharp appreciation versus the dollar, Filipino workers abroad sent home an average of $300 to $500 per transaction in 2006. In 2007, when the peso gained almost 16 percent versus the dollar, the average amount sent home by migrant workers increased to $350 to $550 per transaction, according to BPI, which corners almost one-fourth of the total amount of remittances sent home by migrant Filipino workers every year via the banking system. The peso was one of the world’s best-performing currencies in 2007, gaining nearly 16 percent versus the dollar. The local currency closed at 41.28 to a dollar in 2007, up 15.8 percent from its close of 49.03 to a greenback in 2006. Curiously though, big entities like PLDT and Meralco that for decades have been charging customers fees in the monthly billings to cushion itself from the financial perils of the peso fluctuating against the then mighty dollar do not seem to be rushing to giving customers any respite now that the trend has been seriously reversed. But that, as they say, is another story—for a congressional hearing, perhaps?